Washington State Health Care Authority/PEBB1 Public Employees Benefits Board Meeting June 27, 2000.

Washington State Health Care Authority/PEBB

1

Public Employees Benefits Board Meeting

June 27, 2000

6/27/00 Washington State Health Care Authority/PEBB

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Overview

Roles and responsibilities Purchasing context Guiding Principles July decision making preparation


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Overview of Roles and Responsibilities

PEBB is responsible for designing benefits and determining the terms and conditions of employee participation and coverage, including eligibility criteria. (RCW 41.05.065)


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Overview of Roles and Responsibilities

HCA is responsible for purchasing health services, administering benefits, studying state-purchased health care and exploring alternatives for cost-containment…. (RCW 41.05.021 and 022)


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Purchasing Context:

William Mercer’s National Survey of Employer sponsored health plans• 1999 cost and prevalence data• 10 selected states• 33 state governments• 179 government entities (500+

employees)


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Selected States

Arizona Colorado Connecticut Illinois Iowa

Maryland Michigan Minnesota New York Pennsylvania


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Per Capita Health Costs

$3,860$5,133

$4,228 $4,461

$0

$2,000

$4,000

$6,000

Washington Selected States

State Govt's Govt's 500+


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Medical Contributions: Employee Only

$3

$13

$20

$0

$5

$10

$15

$20

Washington Selected States State Govt's


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Medical Contributions: Family

$18

$89

$117

$0

$20

$40

$60

$80

$100

$120



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Dental Contributions: Employee Only

$0

$3.33 $3.64

$0

$1

$2

$3

$4



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Dental Contributions: Family

$0

$19.20 $17.18

$0

$5

$10

$15

$20



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High Level Comparisons

Similarities:• Benefits are pretty standard• Trends similar (‘99)

Differences:• Per-capita premium cost on low end• Employee contributions significantly lower• Employee contributions for dental


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Purchasing Goals for PEBB Coverage

HCA authorizing statute (RCW 41.05) Purchase most comprehensive coverage

possible for employees and their dependents Design benefit package that encourages

preventive care/wellness care Purchase coverage competitively Offer self-insured PPO product


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Purchasing Goals, cont.

Design package that minimizes the financial burden on employees and the state while providing the most comprehensive care possible

Design benefit package that encourages appropriate utilization

Develop reimbursement methodology that encourages cost containment


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Additional Goals for 2001 Purchasing

Offer employees a choice of plans - offer two or more plans in every area if possible

Ensure equity in employee cost sharing Offer a low or no cost plan in every area if

possible Increase market stability if and where possible Allow/encourage innovative approaches to

ensure access to care


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Cost Sharing Options

Options for who can pay:• employer • patient - when sick• employee - premium contribution• provider - charity

care/uncompensated care/ write-off/ cost-shift


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Current Monthly Cost Sharing

Employee premium contributions (avg $14)

• spouse charge yields about $5• other employee contributions about $9

Patient cost sharing • rough estimate about $25 for MCO• roughly $70 for UMP

Employer premium• about $350


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Guiding Principles for Employee Contributions

Benefit dollars are appropriated for the entire PEBB pool (all lives covered in PEBB), not for individual employees.

Contributions reflect the incremental cost increases for covering more lives.

Premiums should reflect business costs and plan efficiency, not the makeup of membership in that plan. Employees should not pay more because their plan serves sicker people.


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Guiding Principles, cont.

Contributions are established so that cost to employees for a particular plan does not vary by geographic location.

The structure for contributions should discourage double coverage of enrollees.

All employees should have access to a no cost or low cost plan.


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Guiding Principles, cont.

Ensure employees have the information they need to make well-informed purchasing choices - as a principle of managed competition. • information must cover quality and price.

The measurement of employee contributions should be based on• percentage of employees with access to zero

cost/low cost plans • percentage of employees with no access to zero/low

cost plans


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Early Indications for 2001 Medical Program

Mid-negotiation with plans, no final rates, service areas, etc.

Process Review:• Released RFP for managed care medical

plans in April• RFP incorporated streamlining suggestions;

benefit alternatives for pricing ‘fall-back’; legislative changes; geographic incentive…


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Early Indications, cont.

• RFP responses submitted May 31 - bids being fully evaluated

• Evaluation includes: • access components• efficiency indicator• financial indicators (loss ratios) • quality (customer experience; HEDIS measurements

- delivery of preventive services and chronic care; clinical assessment - NCQA accreditation)

• price

• Negotiations still underway


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Preliminary information:• geographic incentive appears to have

helped• initial bids show managed care plans in

every county, with some provider limitations


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Budget challenges Tradeoffs for cost-sharing

• benefit tradeoffs/alternative co-pays don’t bring much savings for MCO’s• negative impact on employer-package

and patients• recommendation for balancing on the side

of premium sharing


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Overview of Decisions to be Made in July

Final benefit designs • Managed Care Organizations (MCO’s)• UMP

Employee Premium Contributions Retiree subsidy/retiree premium sharing


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Overview of Benefit Streamlining

MCO’s• Streamlining of pharmacy benefit• Exclusions clean ups• Coverage Criteria for transplants• Contraceptives (Legislative budget)

Washington State Health Care Authority/PEBB1 Public Employees Benefits Board Meeting June 27, 2000.

Documents

Transcript of Washington State Health Care Authority/PEBB1 Public Employees Benefits Board Meeting June 27, 2000.